The Lords Of Trade

The Chicago Board Of Trade

William F. O`connor, Chairman

March 22, 1992|By William B. Crawford Jr.

William F. O`Connor, the gray-haired, craggy-faced chairman of the Chicago Board of Trade, exhibits certain qualities-toughness, innovation and a deep sense of loyalty to his fellow traders and to the CBOT itself-that have helped make his exchange the largest in the world.

A former Marine who spent two years at the old Navy Pier campus of the University of Illinois, ``Billy`` O`Connor, like many of his contemporaries, has become a multimillionaire since he purchased an exchange seat in 1955 for $6,000 and began trading soybean futures.

For the last 19 months, O`Connor has been chairman of the CBOT, a member- driven organization located for more than 60 years in the landmark Board of Trade building at the foot of LaSalle Street. Founded in 1848, the CBOT accounts for nearly one-third of the approximately 500 million futures contracts bought and sold annually throughout the world.

``There`s no question about it, the exchange has been good to me. But then, the O`Connors have been good to the exchange,`` says the chairman, dressed in a multi-colored trading jacket, an exchange badge bearing the initials ``WFO`` dangling from one lapel.

O`Connor and his older brother, Edmund, former West Siders whose father was an Austin District policeman, have been influential players at the CBOT since they both started working there as floor clerks a half-century ago.

(O`Connor and Co., the flagship futures trading company owned by the two brothers, is capitalized at $20 million. First Options of Chicago Inc., another O`Connor venture, was sold in 1979 to Spear Leeds & Kellogg Securities Inc., a Wall Street specialist firm, for an undisclosed price, believed to be several million dollars.)

O`Connor served as chairman of the powerful Board of Trade Clearing Corp. in 1984-85 in addition to sitting on many key exchange committees. Edmund played an important role in the creation of the Chicago Board Options Exchange, a securities options market that opened in 1982 in a smoking lounge adjacent to the CBOT trading floor and, in just a few years, blossomed into the leading exchange of its kind in the world.

O`Connor, who was elected vice chairman in 1990, moved into the exchange`s top $240,000-a-year post in the fall of that year after Chairman Karsten ``Cash`` Mahlmann, was forced to resign amid embarrassing charges that Stotler Group Inc., a firm Mahlmann headed, had made improper loans to a subsidiary. That December, he was elected to a two-year term by a narrow margin.

Long considered a conservative on exchange policy matters, with little predilection for change or experimentation, O`Connor has singularly outfoxed those who pushed for his defeat during the 1990 election. Within weeks of taking office, he unveiled a series of proposals that, for their boldness, sent shock waves through the more than 3,500 traders and brokers who make up the CBOT`s rank and file.

In just two notable examples, O`Connor has pushed for:

- The merger of costly exchange functions, such as trade clearing and processing, with those of the Chicago Mercantile Exchange, a near-

revolutionary suggestion in light of the mutual jealousies, even enmity, these two markets have harbored for each another.

- The development of a local-area trading network that would, for the first time in the exchange`s 140-plus-year history, allow trading in some futures contracts by exchange members sitting behind computer terminals. The proposal is considered anathema to many traditionalists who contend it compromises the open-outcry method of setting prices and trading futures, a storied system virtually invented at the exchange.

O`Connor is just past the midway point in his two-year term as chairman of the Chicago Board of Trade, and it is too early to tell which, if any, of his initiatives will become reality. It also is too early to tell whether he will run for re-election, he says.

``I try to get to the exchange floor every day even though I sometimes feel like a moving target down there,`` he says, running one hand through a full head of gray hair.

``You know,`` he added, ``now that I think about it, I had more fun in the Marine Corps.``